Science of Valuations

This introductory contribution indicates some of the main prospects of the SIEV 2019 Conference held at the Syracuse campus of the University of Catania (Italy), addressed to the relationship between the fundamentals of the science of evaluations that inspire the main issues with respect to which scholars and experts delimit and characterise their civil commitment in research, education, and field activity. The paper is divided into four sections. The first provides some reference points on the importance of value judgement in terms of the (linguistic and ethical) categories it coordinates, and thus the constitutive capacity it assumes in the reform of the home-city-landscape system, starting from a reconsideration of the foundations of the science of evaluation. The second proposes a comparison, and possible convergence, between two different ways—one “conservative”, the other “progressive”—of conceiving the interdisciplinary nature of valuation science in the prospect of its enrichment and progressive adaptation to the challenges of contemporaneity. The third section proposes the philosophical arguments underlying one of the main issues of the science of value and valuations, the search for a unique value substance, in this case beauty, capable of subsuming the entire spectrum of the authentic values that specify it and constitute the primary reference of valuations. The fourth section concludes this contribution by indicating—starting from some assumptions of project epistemology—not only the role of evaluation, but also the potentialities and responsibilities that in the synthesis of evaluators’ and designers’ expertise characterise the commitment to the formation of orderly and flourishing communities.

This short note has the objective of stimulating a debate on the nature of Appraisal in the light of the recent evolution of the evaluation procedures and of the application areas. After a brief reference to the founding principles codified in the last century, the capacity of statistical-quantitative procedures to replace the role of “expertise” in evaluations is discussed. Finally, the note highlights how the discipline defined by the classic texts of the middle of the last century is still current and effective and that, more or less consciously, even the most recent scientific literature is placed in the wake of the classical economic-estimative tradition.

This contribution introduces some of the theoretical, methodological and operational issues that value judgement science faces in the climate of the radical anthropological, social, political and economic changes due to the progressive accentuation and spread of the humanitarian, climate and energy crises. These issues prompt the science of value judgement to further reflections on the meaning of the content and on the validity of the evaluative statements, hence on their referents and their representation in value measures consistent with the prospect of sharing the planet’s resources and peoples’ destinies. The proposed considerations invite us to go back and reflect on the foundations of Appraisal, which stands out for its original reference to distributive justice, on which it bases its essential civil commitment. The main aspects of a reflection on the fundamentals are: the conditions of truth of the judgement; the elements of authenticity of its contents; the originally normative nature of the valuation; its implicit prospective dimension; the relationship between subject’s agency and social mechanisms’ impersonality through which the references of the valuations—market prices and preference orders—are identified as the more or less relevant terms of the value judgement.

In this chapter I put forward some reasons to show how judgments of fact and judgments of value are intertwined. These reasons run contrary to a deep-rooted cultural tradition, which sees a sharp distinction—a dichotomy—between the natural sciences, on the one hand, and the human sciences, on the other, and therefore between facts and values. Accordingly, I show which tradition this is and what the advantages of abandoning its main tenets are. Central to the exposition is the explanation of why the science of valuations can be taken to represent one of the best instances of the inextricability of fact and value.

In this chapter some basic notions and recent developments in the theories of judgement and truth will be applied, as a case study, to real estate estimates in order to answer the following questions: are they descriptive or evaluative judgements? Is their truth absolute or relative to some parameters? Is their truth a matter of correspondence with objective, mind-independent facts or is it a matter of coherence with some mind-dependent standards (in the broad sense of “mind-dependent” which includes cultural and social standards)? The answers to these questions will show that real estate estimates are an interesting borderline case between descriptive and evaluative judgements, absolute and relative truth, correspondence with an objective reality and coherence with mind-dependent standards.

The dizzying growth of human settlements generates unseen conflicts and challenges existing value systems in the domains of spatial planning, management and real estate. Valuation practices have long been called upon to set aside seemingly acceptable paradigms in which they operated with questionable effectiveness. Compared to the past, the search for and recognition of values under conditions of global risk and radical pluralism do become a priority. It is increasingly urgent to recognize new classes and dimensions of value, but above all to know how to put them into action as unpredictable social coefficients. The increasingly hybrid social interactions change the concepts of public, common or market good, testing the mainstream theories of utility and the very way of looking at the role of public administration. The following notes seek to explain how values do not exist in and of themselves, but are blossoming in their action. This invites valuation practices to understand the genesis of values, their phenomenology and to construct updated cognitive pathways.

The contemporary world grapples with an array of crises encompassing climate upheaval, global pandemics, ecological degradation, species loss, and deep-seated inequality. The intricate interconnections among these challenges align with the 2030 Agenda for Sustainable Development. Overcoming these crises demands sweeping transformations affecting economies, institutions, values, beliefs, and worldviews, shaping our relationship with the environment. The ‘Green Deal’ underscores the significance of radical value realignment and introduces a European sustainability competence framework to drive ecological learning within the EU. This article elucidates how the appraisal discipline can ignite fresh values, mindsets, and conduct, steering us towards a sustainable future. Through the prism of the value creation process and our historical context, we explore the potential of adopting a historical perspective, as conceptualized by Hartog, which encompasses society’s treatment and dialogue about its past. By embracing this vantage point, intertwined with the realms of science history, psychology, anthropology, and transdisciplinary mode-2 science, emerges the potential for a novel epistemology for prevailing sustainability narratives. This article posits that the appraisal discipline holds the potential to contribute to shaping this evolving epistemological landscape.

The complexity of the contemporary city from an economic, social, cultural, natural, health, environmental point of view and regarding the effects of climate change, poses a problem of urban quality of life for various reasons. New interpretative models must be identified to overcome these new challenges. Measuring the value of urban quality is equivalent to identifying the merit of the city has in producing individual and social well-being. This issue has both conceptual and operational implications. In the field of theoretical approaches to the study of quality of life, the Sen’s capability approach has become relevant. The paper promotes an axiology of the value of urban quality able to grasp the complexity that characterizes living in the contemporary city. Based on the approach to capability, the city can be interpreted as the set of functionings, the urban policies can be interpreted as equipment to expand the capabilities of people living there. Based on capability approach the urban quality can be interpreted as the urban quality of life, that is as a measurement of the capabilities achieved by people who experience the city, in the individual perspective as well-being achievement, in the social perspective as agency achievement. In this regard, the paper proposes an interpretative model and an operational approach aimed at measuring the urban quality of life, to support decision-makers in the policies that encourage the achievement of the capabilities by people who live in the city, producing individual and social well-being.

Two major events have impacted Italian cities: the economic crises of 2008 and 2012 and the Covid-19 pandemic in 2020 and 2021. This research aims to verify whether, and if so how, Italy’s metropolitan cities, which play a role in regional areas, have transformed over the past decade. To examine this, real estate market values, which are considered an indicator of the attractiveness of cities, were examined, together with other variables describing the economic and demographic trends of the territory. Cluster analysis was chosen to represent the observed changes, aggregating cities according to common patterns. To obtain a long-term assessment the analysis considered the cities’ reactions between 2012 and 2022. The results revealed stable and rigorous trends. In the main cluster, which includes Milan, a process of economic-territorial concentration is observed, which is influenced neither by the 2008–2012 crisis or the pandemic. In the second cluster, peripheral metropolitan cities that have undergone very limited growth developments are identified. Finally, the third cluster consists of cities with growth opportunities and critical economic and demographic aspects.

The role of urban commons is an issue of growing concern for all those involved in the re/generation of our cities, from both a theoretical and an operational point of view. However, their evaluation does not seem to have received equal attention to that for economic and environmental issues. This article, adopting a theoretical-methodological perspective, investigates the possibility to evaluate the effects that architectural and urban projects have on the quality of urban commons and which kind of evaluative approach should be suitable. After a short introduction, the contributors face and specify the question of which are the distinctive characteristics of common goods, and significantly their relational nature. This is followed by an explanation of a community-based concept of urban commons which requires a commonly shared governance model and a new evaluation approach. The further step argues the need to define the “value content” of urban commons according to their communitarian-relational nature. This means that their value does not merely depend on technical-functional and economical aspects, but must consider their community-relational quality and consequently the adoption of collaborative decision-making and governance. In this context, the contributors suggest an evaluation approach that should be firstly, open to the participation of all stakeholders (the community, the “professional authors”, local government, etc.); secondly, able to grasp the community aspects; and thirdly, build spaces for dialogue and relationship between all the actors in the search for shared solutions.

Economic evaluation of public investments implies the responsibility of choosing how to use public resources to achieve maximum social well-being. Does pursuing the goal of public economic efficiency always guarantee intergenerational solidarity? And, conversely, can the pursuit of broad solidarity damage the community in terms of sub-optimal use of resources? The Social Discount Rate plays a strategic role in the evaluation of public investments, as it may influence, or even overturn, the resulting value of various indicators of economic feasibility, such as Net Present Value. Moreover, the choice of the Social Discount Rate reveals whether and to what extent political institutions make public investments in accordance with the fair use of natural resources and the preservation of cultural heritage that will be left to future generations. This paper aims to highlight the effect that the political decision to set a particular Social Discount Rate would have on the economic feasibility of investments in energy retrofitting of public buildings located in contexts subject to historical or landscape constraints. A case study is analyzed in terms of Net Present Values assessed according to different Social Discount Rate that are set in a few selected Italian regions and European countries. As the results are divergent, it would be advisable to relaunch the scientific debate on the Social discount rate in Italy and the responsibilities of administrative and political bodies in translating theoretical approaches into clear and consensual protocols and rules for setting the Social Discount Rate to eliminate discretionary power that creates social and territorial inequalities.

Before being implemented, urban plans must pass an impact assessment to verify the effective support of the program for the sustainable development of a territory from an environmental point of view. In this domain, the contribution of Strategic Environmental Assessment (SEA) in supporting sustainable and resilient planning processes is crucial. However, in urban and neighborhood contexts, where different forces and entities influence the decision-making process, it is essential to add social, economic and environmental aspects to the sustainability assessment. This chapter explores the role of several evaluation tools that can consider different and innovative assessment dimensions and issues related to the urban planning field. This analysis concerns the case of the revision of the Municipal Plan of the City of Turin to contribute to testing protocols for the sustainability of the Plan, tools to analyze and evaluate urban resilience, and procedures to estimate Ecosystem Services (ES). According to the point of view of the governance of urban transformations, the final result of this preliminary research concerns the illustration of the role of assessment tools to measure urban sustainability to respect the environment, promote public health and well-being of citizens, and enhance economic productivity.

Civic uses are ancient collective rights to use the land, that people have exercised in the past, for example by collecting grass, wood, fruits, or fishing or digging sand: in this manner, from the use of the public areas, they drew their livelihood. In addition to the well-known themes of easements and temporary occupations of land and buildings, the appraisal theories have also addressed in the past the problem of civic uses, focusing—in particular—on the determination of the utility resulting from the practice of civic uses of sowing and grazing and defining how to calculate the liquidation fee. Since there are fewer and fewer economic resources available to Local Authorities for services on the territory and since the areas once dedicated—for example—to grazing and woodland are now sometimes occupied by infrastructures that are not economically irrelevant (for the production of hydroelectric energy, for ski facilities for tourist use, etc.), an apparently outdated issue like that of civic uses has suddenly become popular again. In this direction, some public administrations have felt entitled to require the payment of large amounts of previous fees, in an attempt to demonstrate—in many cases without evidence—the existence—in the past—of civic uses on land granted now—in a costly way—for the exercise of functions different from the traditional ones. It is certainly less unpopular to tax a few large subjects, which often have high revenues and which, for their convenience, always tend to find an agreement with the territory, rather than with the community in a widespread manner. However, the question arises—even in the face of the case of the former local property tax on “bolted” installations—whether it is correct to distort the concept of compensation for civic use with only an obvious need for “cash making”, if and how to differentiate the civic use for grazing from that for more valuable activities and, also, how to “distribute” this annual contribution in a wider territorial context than just the municipal one. This paper investigates an operational context in which the evaluation should bring order amongst special and particular values and presents the issue of civic uses, dealing in particular with the case of a hydroelectric power station. Assuming the existence of civic uses on land used for the production of energy, it deals with the determination of compensation for occupation (past and future), developing some scenarios more or less favourable to the two parties (public and private).

The paper focuses on the evolution in time of evaluation methodologies and their application; its aim is to provide a frame for spreading their implementation in the design process. In the 60s, they were only used in USA for social and residential housing, and later, in the 90s also in the European Community for territorial planification and government policies. Until now, the real potential of these methodologies has been applied only in few cases such as housing construction by means of Qualitel, HQI, Level(s) or social welfare with Well certification. Due to the increasing spread of BIM (Building Information Modelling), that brings to a technological change based on a different use of the available information, the evaluation process may become part of any design process. Within this scope, Model Checking already enables to check and validate 3D models by controlling interferences (Clash Detection) and coherences with existing rules (Code Checking). The next step, which is a future challenge for the researchers in our discipline, is to develop plug-ins capable to meet the requirements set by designers and stakeholders.

Given the different stages of the development of a building project, the economic planning phase of the intervention is quite strategic for its feasibility (Battisti et al., Land 9(1), (2020); Bottero et al., A literature review on construction costs estimation: Hot topics and emerging trends. Green Energy and Technology, pp 117–131, 2021; Napoli et al., Sustainability 11(4), 2019; Rebaudengo and Prizzon, Lecture notes in computer science (including subseries lecture notes in artificial intelligence and lecture notes in bioinformatics. Springer Verlag, pp 473–484, 2017; Rebaudengo and Piantanida, IOP conference series: materials science and engineering, 2018; Rebaudengo et al., Smart innovation, system and technologies. Springer Science and Business Media Deutschland, pp 635–642, 2019; Sdino and Rosasco, Appraisal and Valuation: Contemporary Issues and New Frontiers. Springer Verlag, 2020). In the public works field, the correct planning and estimation of costs allows an effective and efficient allocation of public economic resources and respect for deadlines, which have a great importance for works destined to essential public services. The last Italian legislation about the planning and construction of public works (Legislative Decree n. 50/2016) has introduced some changes relating the economic planning and cost estimation, the Article n. 23—paragraph 7 establishes that the definitive project of a public work must contain “definitive quantification of the expenditure limit for the realization and the relative time schedule, through the use, where existing, of the price lists prepared by the territorially competent regions and autonomous provinces, in agreement with the Italian territorial divisions of the Ministry of Infrastructure and Transport”. The reference to the regional price lists for the evaluation of the economic amount of a public work (project) aims to establish a single tool for the different operators (public administrators, designers, construction companies, etc.) who have to plan and estimate the costs of the project since the early phases of the design. Unlike the recent past, where the cost estimate of a public (and private) work could be made using municipal or provincial price lists, nowadays the price lists by Italian regions must be taken as a reference. The aim of the legislator is to take as a reference, in the economic planning phase, a single tool for estimating costs, sufficiently representative of the various cost formation functions in the building sector and to consider the specificities of local economic and productive realities. At this time, all Italian regions have a regional Price List which replace those developed on a local basis; their use to estimate the cost to be assumed as a basis for the tender has eliminated the problem of estimating, for the same project, different costs depending on the local Price List utilized. For a public work, any differences of the construction cost estimated in the design phase can be justified only by the different location of the work at a regional level and no longer provincial or municipal level. Taking as reference a case study relating to the construction of a medium-sized hospital (300 beds), this study aims to develop a comparison of unit costs derived from the analysis of the price lists of twenty Italian regions. The aim is to verify whether, for the same project, the construction costs of the main workings vary in relation to the regional location and what is the average difference. This is important not only for an efficient economic planning of public works by local and national public administrations (preparation of the necessary budget, etc.) but also for a more effective control of the differences between the initial and final budgets. The regional Price List for estimating costs represent new tool for an efficient valuation and governance of the public projects developed by public administrations, a topic debated within the “Evaluation Sciences” conference organized by Siev, in Syracuse (Italy), in July 2019.

This paper intends to examine the property market structure, taking into account the effects determined by the 2007 financial crisis, that has hit the real estate sector producing both the multiplication and fragmentation of the supply and a progressive reduction in the demand. Starting from an examination of the market structures that typically describe the behaviors of the real estate market operators, the research prefigures the hypothesis of oligopsony, normally referable to movable asset classes. As evidence of the hypothesis, a case study referring to the city of Cosenza (Southern Italy) has been analyzed. The study carried out highlights market anomalies that can occur in specific conditions, by determining the difficulty to identify reliable comparables for the assessment of property market values.

Automated valuation models are increasingly used in appraisals. In some circumstances, their use provides accurate estimates with advantages in terms of time and cost of the process. Besides the programming capability, the reliability of an automated model depends on the data it has to train and verify its outcomes. In literature, many researches test the predictive capabilities of models without investigating whether similar performance would have been achieved with less data. The issue is crucial for evaluators, who aim to optimise effectiveness (accuracy) while reducing cost (data retrieval) in order to gain a competitive advantage over the industry. The research aims to test whether there is a minimum dataset size with which AVMs achieve their maximum performance. Tests were conducted on increasing sizes of the dataset in order to observe the behaviour of the models as the number of data increases. Three econometric models (Linear, polynomial and logarithmic regression) and three machine learning models (Regression tree, Random forest and Nearest neighbors) were tested. The results confirm that there is a minimum dataset size only for the machine learning models, whereas the hedonic models show little correlation with the amount of data. However, the degree of accuracy of the models seems to depend not only on the number of samples but also on the amount and type of predictors.

The technological and industrial development impacts on the climate and natural environment leading the European Commission to promote strategic actions aimed at (i) reducing the amount of permeable surface area, and (ii) increasing the presence of green areas in urbanised contexts. With reference to a residential properties sold in the local real estate market in the first half of 2019 and located in a specific municipal trade area of the Rome city in Italy, the work aims to determine the average incidence of the natural component on housing prices. In particular, the determination of the incidence of the considered set of variables is assessed through the Market Comparison Approach application which, due to its simplicity of use, is well suited to be adopted by evaluators for assessing and testing importance of including the green elements in the built environment and the achievement of the sustainable goals set by the Agenda 2030.

Pursuing sustainable development of the built environment is now at the center of the international agenda. The challenge to transform real estate investments from innovation to established practices, on the one hand, has to balance the need for adequate revenues and, on the other hand, to ensure affordable costs for users. In particular, investors often consider the costs of green investments to be too high compared to expected returns. The goal of this paper is to verify whether there is a significant differential in performance such as to make the green building interventions more profitable than traditional ones. Through the comparison of two financial models it was possible to argue that green development interventions have significantly higher rates of return compared to traditional development operations.

Urban projects, plans, and programs are subject to specific valuation procedures, which have the objective of assessing the sustainability of the proposed strategies. In this domain, Multiple Criteria Decision Aiding (MCDA) provides a wide set of methods for sustainability assessment, by comparing alternative projects or criteria on heterogeneous measurement scales. A crucial step in the application of MCDA methodologies to real-world problems concerns the assessment of criteria relative importance and in turn the degree of preference attaining different alternatives, due to behavioral issues which can affect final results. This paper illustrates an experimental protocol developed in the context of the evaluation of an urban regeneration program in Northern Italy. In the experiment, a group of five experts and stakeholders were asked to weigh a set of multidimensional attributes according to three different weighting procedures, namely the Analytic Hierarchy Process, the SWING method, and the SMARTER method. The paper discusses the results obtained in the set of weights, pointing out differences as well as similarities and discussing the pros and cons of the three different weighting procedures.

The paper presents a multi-methodological, hybrid, and adaptive evaluation approach to support the development of improvement strategies and identify alternative tourism routes for promoting resilient landscapes. The approach introduces a Multi-Stakeholder Spatial Decision Analysis (M-SSDA), which combines Multi-Stakeholder Decision Analysis (M-SDA) with GIS processing to facilitate interaction among the different stakeholders involved in establishing a common vision. The reliability of the decision-making process is increased by using multiple techniques. This is achieved through collaboration among local stakeholders, researchers, experts, private entities, and local government to identify the perceived values of the landscape. This collaboration aims to identify shared values that are essential for testing new approaches to resource management and identifying thematic  routes to promote sustainable tourism in the Sila National Park (Italy).

Abandoned 19th and 20th century industrial buildings represent a particularly vulnerable form of Cultural Heritage and current evidence shows that their preservation is frequently at risk. Overall, the implementation of adaptive reuse interventions is generally recommended as a sustainable strategy to conserve these buildings, make them meaningful for the present society and eventually enable their transmission to future generations. However, the lack of awareness about the multiple values of Industrial Heritage (IH), the scarcity of economic resources and the presence of competing interests of different stakeholders—e.g. owners, local government, bodies for the protection of Cultural Heritage, potential investors, residents, etc.—make the decision-making process about the future of IH far from being straightforward. Capitalizing on the case of a recently abandoned industrial area located on the Ligurian coast (Italy), this piece of research aims to highlight that investigating the points of view of relevant communities (e.g. about the intangible values attributed to IH, perceived socio-economic needs, etc.) at an early stage of the decision-making process can contribute to reduce social conflicts and favor the development of projects able to combine the fulfillment of socio-economic objectives with the preservation of the local identity and memory. Then, as a preliminary step towards the adoption of a holistic approach, the paper explores communities’ willingness to pay for favorite redevelopment scenarios, to elicit the intangible values associated by different subjects to IH. Finally, it advances that evaluation frameworks to be adopted in the future should be able to consider the principles of civil economy and intergenerational equity.

The European and international debate recognises reusing and enhancing Cultural Heritage as critical in sustainable and circular urban regeneration strategies. In addition, some categories of assets, such as former religious buildings, suggest activating network strategies to consider complex values and implement multi-method and multi-actor approaches that encourage different stakeholders’ engagement in innovation reuse processes. The paper describes a Decision Support Framework’s proposal, the Collaborative Heritage Evaluation (Co-HEva), based on a multi-methodological decision-making process tested in actual experience. The aim is to identify the potential driving assets in structuring a collaborative network strategy for cultural heritage enhancement and elaborating heritage-led urban regeneration processes. The application of multi-criteria analysis, characterised by selecting and defining site-specific criteria and indicators, generates a priorities map useful in implementing collaborative and cooperative regeneration processes. The action-research case activated in Salerno’s historical centre in Italy has allowed verifying the approach effectiveness in supporting the elaboration of public policies oriented to the regeneration of unused or abandoned religious and cultural heritage as a new catalyst of vibrancy and vitality.

In the present research the analysis of the financial feasibility of a Public Private Partnership (PPP) intervention, related to the enhancement and management of a social housing complex, has been carried out. With reference to the redevelopment initiative of Torrevecchia area located on the western periphery of the city of Rome (Italy), the Discounted Cash-Flow Analysis (DCFA) has been implemented. The study aims to verify the efficiency in the use of the PPP operational tool through the assessment of the costs and the revenues deriving from the renovation and the expansion of the considered complex. In the analysis, a periodic fee paid by the Public Administration to the private investor has been considered and determined, able to ensure the financial sustainability of the initiative and to comply with the regulatory constraints in the Italian context. The redevelopment initiative analyzed demonstrates the relevant role played by PPP procedures in the context of urban regeneration and functional reconversion of collective interest properties, able to identify a compromise solution between the current contraction of the public spending capacity and the financial feasibility of the territorial investments.